Thomas Cook likely acquire 74.9% shares in Sterling Holiday Resorts

The deal announced by holiday operator Thomas Cook to merge Chennai-based Sterling Holiday Resorts (India) Ltd could possibly see the former acquiring 74.9% of the equity share capital, through various modes.

According to Thomas Cook's open offer, made by ICICI Securities Ltd on behalf of Thomas Cook Insurance Services (India) Ltd and Thomas Cook (India) Ltd, for acquiring shares from the share holders of Sterling Holiday Resorts, the company would purchase the additional equity shares which together would cause the aggregate shareholding of the acquirer in Sterling Holiday to be equal to 74.9% of the equity share capital.

This would include the subscription shares, the minimum sale shares and the shares acquired through the open offer, it said.

The open offer is to acquire 2,34,86,264 equity shares of face value of Rs 10, constituting 26% of the voting share capital, at an offer price of Rs 98 per equity share. The open offer is triggered by the direct acquisition of 2,06,50,000 equity shares, which is 22.86% of the voting share capital for Rs 186.86 crore.

An acquisition of between 1,15,92,846 to 1,80,07,677 equity shares, which is between 12.83% to 19.94% of the voting share capital, for a price of around Rs 113.6 crore to Rs 176.5 crore from Bay Capital Investments, India Discover Fund Ltd, Bay Capital Investment Managers Pvt Ltd, Sidharth Shankar and Dhanlakshmi S. Post transaction, these parties would have a total of 5.24 to 12.34% of the voting share capital.

On February 8, Prem Watsa-owned Thomas Cook India has announced a marger of Sterling Holiday into it in a cash and stock deal that values Sterling at Rs 870 crore. The companies expect that both the brands would benefit from the merger, which would see Sterling continuing as an individual company under the Thomas Cook brand.